The Global

Pharmaceutical industry
Submitted byGroup 2
Abhinav Anand
Ashutosh Sharma
Aman Singhal
Palka Kejriwal
Disha Aggarwal
Manoj Pandey
Zoe Kasprzak

Industry Analysis

There are four broad types of industry players :

Ethical conventional pharmaceuticals,
biological agents and vaccines
Over-the-counter can be purchased without
prescriptions
Generic copied drugs with same dosage and
efficacy
Biotech - use biotechnology and genetic
engineering

Ageing population coupled with expensive solutions

and increasing customer expectations are creating
pressure on companies

Generics pose a huge threat to ethical drugs

manufacturing firms

Most firms are restructuring their manufacturing by optimizing

their number of production sites and placing them on strategic
locations offering tax advantages (Puerto Rico, Ireland)

Parallel trade is prevalent in most parts of Europe which result in

significant losses for the industry

Majority of global sales originate in the Triad (US, EU and Japan)

with 10 countries accounting for over 80% of totals sales.
Emerging markets however, provide the companies with huge
potential

R & D cost are increasing each year but the number of new
products are declining as companies
are focusing more on
blockbuster products

Competitive Market
Scenario
Main competition among GSK, Pfizer and
Novartis
No company held more than 7.5% market
share
Competition to own more and more
Blockbuster drugs
Increase in R&D cost, incentive from Patenting,
Innovation
Benefit from First mover in the market

PESTEL Analysis

Political Forces

Government Policies
One powerful purchaser

Economic Forces

Demand and Supply

Recession
Change in Income

Social Forces

Changes in Age structure

Educated consumers

Technological and Environmental Forces

The advent of genomics

Internet
Focus towards Greener Manufacturing Process

Legal Forces

The intervention of health authorities

Patent Protection

Scope of Innovation in
Pharmaceutical Industry

Proteomics- Identify new targets for pharmaceutical

interventions

Variation in genetic make-up- Understanding susceptibility to

disease

Pharmacogenetics- genetic knowledge to understand why some

patient populations benefitted more than others from a therapy

Managing Innovation

Internal Biotechs- for eg. Aventis manages complex web of

alliances with more than 300 universities and biotechs

Contract research Organisations(CROs)- Costs more to trials

but capacity could be switched on or off at will

Innovation Risk

Blockbuster- A blockbuster drug is typically a long

term therapy for a common disease that offer a
step change in efficacy or tolerability and is
marketed globally

High R&D risks

Renders company vulnerable to generic competition at patent expiry

High Cost of Clinical trials and R&D

Key Learnings

Transferring of Marketing across countries

Cost advantage and Economies of scale

Importance of Innovation

Interdependence encouraging the globalization of

competitors

Reduction in the possibilities for convergence

Patent Protection

Shift in consumer behaviour and attitudes of governments

Parallel Trade

Future Scope

Maximizing sales force effectiveness

More efficient DTC advertising

High compression marketing

Differential Pricing

Increasing Product Life cycle

Effective CSR through a diverse Portfolio

Thank You.